Over 1.06 lakh directors have been identified for disqualification because of association with shell companies, the government announced on Tuesday.

"The Ministry of Corporate Affairs has identified 1,06,578 Directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12, 2017," an official statement said in New Delhi.

This follows the recent cancellation of registrations of 2.09 lakh "defaulting" companies that have not been carrying out business activities for a long duration.

As per Section 164 of the Companies Act, a director in a company that has not filed financial statements or annual returns for three financial years continuously would not be eligible for re-appointment in that company or any other firm for five years.

The ministry said it is further analysing the data of the 2.09 lakh firms available with the Registrar of Companies (RoCs) to identify the directors and the major beneficial interests behind these entities.

"Profiles of directors such as their background, antecedents and their role in the operations/functioning of these companies are also being compiled in collaboration with the enforcement agencies," the statement said.

Moreover, money laundering activities performed under the aegis of these companies are also being investigated, it added.

The Corporate Affairs Ministry has also identified professionals, chartered accountants, company secretaries and cost accountants associated with the defaulting companies.

Besides, such persons "involved in illegal activities have been identified in certain cases and the action by professional institutes such as ICAI, ICSI and ICoAI is also being monitored".

According to the government, there are about 11 lakh companies with active status after deregistration of over 2.09 lakh firms.

According to the statement, the new Minister of State for Corporate Affairs PP Chaudhary is closely monitoring the situation emerging out of cancellation of registration of the companies and is holding regular meetings with officials of the ministry and various related organisations.

These include Serious Fraud Investigation Office (SFIO), ROCs, Department of Financial Services, Indian Banks Association and other departments involved in the crackdown against defaulting companies.

"We are identifying the defaulting directors of these shell companies. My officers have assured me that by the end of this month, we would be ready with the relevant details of all defaulting directors of these shell companies," the minister said.

"The fight against black money shall be incomplete without breaking the network of shell companies. Possibility of using the shell companies for laundering the black money cannot be undermined," he added.